Case Nos. 157, 166 of 2016 and Case No 18 of Coram. Shri. Azeez M. Khan, Member Shri. Deepak Lad, Member. CASE No.

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1 Before the MAHARASHTRA ELECTRICITY REGULATORY COMMISSION World Trade Centre, Centre No.1, 13th Floor, Cuffe Parade, Mumbai Tel /65/69 Fax Website: / www. merc.gov.in Case Nos. 157, 166 of 2016 and Case No 18 of 2017 Coram Shri. Azeez M. Khan, Member Shri. Deepak Lad, Member CASE No. 157 of 2016 Petition of Windmill Owners Welfare Association of India regarding outstanding payments for sale of wind energy and interest on delayed payments due to its Members from Maharashtra State Electricity Distribution Co. Ltd. under their Energy Purchase Agreements M/s. Windmill Owners Welfare Association of India Maharashtra State Electricity Distribution Co. Ltd.... Petitioner... Respondent Appearance For the Petitioner For the Respondent : Ms. Dipali Sheth, Adv. : Shri. Ashish Singh, Adv. CASE No. 166 of 2016 Petition of Rajlakshmi Minerals regarding outstanding payments for sale of wind energy and interest on delayed payments due from Maharashtra State Electricity Distribution Co. Ltd. under its Energy Purchase Agreement M/s Rajlakshmi Minerals Maharashtra State Electricity Distribution Co. Ltd. Petitioner. Respondent Appearance For the Petitioner For the Respondent :Shri Viraj Parikh, Adv. :Shri. Ashish Singh, Adv. CASE No. 18 of 2017 Petition of Dhanji Developers regarding outstanding payments for sale of wind energy and interest on delayed payments due from Maharashtra State Electricity Distribution Co. Ltd. under its Energy Purchase Agreement Order in Case Nos 157, 166 of 2016, and 18 of 2017 Page 1

2 M/s. Dhanji Developers Maharashtra State Electricity Distribution Co. Ltd... Petitioner. Respondent Appearance For the Petitioner For the Respondent :Ms. Dipali Sheth, Adv. :Shri. Ashish Singh, Adv. ORDER Date: 16 May, 2017 The Wind Energy Generators and Association in these Cases have filed Petitions with regard to recurring non-payment and/or late payment of the principal amounts as well the Delayed Payment Charge (DPC) or late payment surcharge, which is the interest for delayed payments, under their Energy Purchase Agreement (EPAs) with Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL). At the hearing held on 16 March, 2017, the Commission stated that, since similar issues have been raised in these Petitions, they would be heard together, and the Commission would also consider a issuing a common Order, to which the Parties agreed. CASE No. 157 of Windmill Owners Welfare Association of India (WOWAI), registered in Maharashtra under the Societies Registration Act, 1860, with its registered office at D/29-12 TTC Industrial Area, Turbhe, Navi Mumbai, has filed a Petition on 25 November, 2016 citing Section 86(1)(f) of the Electricity Act (EA), 2003 for adjudication of dispute with regard to outstanding payments to certain Members by MSEDCL. The list of the concerned Members is annexed to this Order. 2. The Prayers of WOWAI are as follows: a) Direct MSEDCL to comply with the terms of the WEPAs entered into with the Specified Members of the Petitioner as specified in Annexure A in letter and spirit including its obligation to make payments in timely manner; b) Direct MSEDCL to comply with the terms of the WEPAs entered into with the Specified Members of the Petitioner as specified in Annexure A in letter and spirit including its obligation to pay agreed delayed payment charges till full and final settlement; c) Direct MSEDCL to set off against the electricity bills of such Members of the Petitioner who have sought such relief against dues payable to such Members of the Petitioner along with DPC till date of set off of all dues; d) Direct the Respondents to continue complying with the terms of WEPAs by honoring its commitments under the WEPAs; e) Award costs of these proceedings against MSEDCL and in favour of the Petitioner; and Order in Case Nos 157, 166 of 2016, and 18 of 2017 Page 2

3 f) Pass such other order(s) as the Hon ble Commission may deem just in the facts of the present case. 3. The Petition states as follows: a) The Members of WOWAI are inter-alia engaged in generation of Wind Energy. The Petitioner Association is formed to assist its Members in representing them before various fora for making suggestions, raising issues which are common to all, seek regulatory guidance, etc. b) Certain Members of WOWAI have entered into various Wind EPAs with MSEDCL for the sale of power generated by their Projects in Maharashtra. As per Section 4.01 of all the EPAs, the term of the EPAs is 13 years from the date of the commercial operations of the Plants. All such EPAs of the Members are valid and subsisting. c) As per Section of the EPAs in respect of Group A Members, a credit period of 45 days from the date of receipt of the invoice is available to MSEDCL for releasing the payments. While MSEDCL is entitled to certain rebates in case of early payments, a late payment surcharge/dpc at 2% per annum above the State Bank of India (SBI) short term lending rates is attracted in the event of delay beyond 45 days: Section 12.02: Payments The due date of payment shall be 45 days from the receipt of the Seller s monthly energy bills by the MSEDCL and will be paid by account payee s Cheque in the name of seller or authorized representative in whose name power of attorney is given by the seller. In case of delay in payment beyond the due date, the Seller shall be entitled to interest on such delayed payment at the rate of 2% per annum above State Bank of India short term lending rates. The MSEDCL however, shall be entitled to make adjustments in the Seller s invoices for any charges/costs incurred on behalf of Seller and payable by the Seller under this Agreement. This shall be shown in the audited statement issued by the MSEDCL. d) As per Section of the EPAs in respect of Group B Members, a credit period of 60 days is available for releasing payments and late payment surcharge/dpc at 1.25% per month is attracted in the event of delay beyond 60 days from the date of receipt of the invoice: Section 11.04: Payments The due date of payment shall be 60 days from the receipt of the Seller s monthly energy bills by MSEDCL and will be paid by account payee s cheque in the name of Seller or authorized representative, in whose name power of attorney is given by the seller. In case of delay in payment beyond the due date, the Seller shall be entitled to a late payment surcharge at the rate of 1.25% per month shall be levied by the generating company..." e) MSEDCL has paid principal sums against invoices raised but have failed to pay Order in Case Nos 157, 166 of 2016, and 18 of 2017 Page 3

4 DPC. MSEDCL requested some Members not to claim DPC and, in case it was already claimed, then to waive it since MSEDCL is in a precarious financial position due to which it is unable to make payments to Generators within the due date. f) MSEDCL has admitted its liability towards payment of DPC. It sought waiver of DPC to protect its interest but did not think of offering to set-off the dues payable to those Members who are also consumers of MSEDCL. Such a stand will discourage private investors to participate in invitations of the Government to invest in Maharashtra in future. g) Monthly sales invoices for power produced and supplied to MSEDCL are unpaid for more than 12 months. Total dues outstanding from MSEDCL till October, 2016 were to the tune of Rs. 66,90,52, towards outstanding invoices and Rs.6,17,94, towards the DPC. Non-payment for such prolonged period and delayed payments is causing severe constraint on other businesses and financial hardship to the specified Members of WOWAI. h) The period of 45 or 60 days under the EPAs for payment against invoices is very liberal compared to other States where it is around 30 days or less. Despite such liberal provisions, MSEDCL invariably delays the payment of invoices, resulting in substantial loss to the Wind Energy Generators. i) Enough opportunities have been given to MSEDCL to perform its obligations under the EPAs. MSEDCL neither made payments nor responded to the demand requests or made any attempt to resolve the issues arising out of its non-performance. j) As per Section of the EPAs pertaining to dispute resolution, the Commission is conferred with the jurisdiction to deal with non-performance of any obligation under the EPAs:: Section Dispute Resolution Any disputes arising out of, in connection with or with respect to this Agreement, the subject matter hereof, the performance or non-performance of any obligation hereunder, that cannot be resolved by negotiation among the parties within sixty (60) days, shall be exclusively adjudicated before MERC and any other Court in Mumbai having jurisdiction in the matter. The Commission may direct MSEDCL to comply with the terms of the EPAs in letter and spirit, including its obligation to pay the outstanding invoices as well as DPC to the Specified Members of WOWAI. These Members are also entitled to carrying cost on such outstanding amounts till the final repayment. k) Recently, the Rajasthan Electricity Regulatory Commission (RERC), in Petition Nos. 570 of 2015, etc. of Arvind Construction Co. and others, has held that the Distribution Licensee is liable to make payment as per the PPAs, including DPC: 17.The Respondents did not dispute the delay in payment of bills but contended that delay in payment of bills was not deliberate and was due to circumstances beyond their control as they were facing severe financial hardship. 18. The Commission has looked into the PPAs signed and in particular clause relating to payment of LPS which clearly provides interest on late payments for the period of delay. Respondents have not disputed the fact that there was Order in Case Nos 157, 166 of 2016, and 18 of 2017 Page 4

5 delay in payments by them. 19. In view of undisputed fact that there was a delay in the payment and clear terms of PPAs which entitle the generators for LPS, we are of the view that Respondents are liable to pay interest as provided in the PPAs for the delayed period. The defense of the Respondents that the delay was on account of its financial difficulties which was beyond control of the Respondents cannot be countenanced and has to be rejected. The Respondents, which have signed the PPAs with a clear understanding that delayed payment will attract interest, cannot plead their financial difficulties. It is for the Respondents to manage their finances in such a way that they comply with terms of PPAs. 20. From the foregoing discussions, Commission directs the Respondent Discoms to calculate interest due on account of delayed payment in terms of the PPAs, subject to the claim being within the limitation period, within four (4) weeks from today and make the payment of interest against the delayed payment as per the terms of the PPA, unpaid invoices and refund of deduction of 2% Rebate within a period of eight (8) weeks from today. 21. The Petitions stand disposed of accordingly with no order as to the cost. l) In Case No. 150 of 2015 in the matter of Hindustan Zinc Ltd. (HZL) vs MSEDCL, this Commission, vide Order dated 10 August, 2016, upheld that MSEDCL is liable to pay DPC on the outstanding payments: In view of the foregoing, the Commission directs MSEDCL to pay the late payment surcharge due to HZL as per Section of the EPA within 30 days. Thereafter, interest will be payable to HZL at 1.25% per month on any surcharge amount remaining to be paid. 4. In its Reply dated 14 March, 2017, MSEDCL stated that the concerned WOWAI Members have has not received their payments on the due dates due to the following financial constraints faced by MSEDCL; a) The entire cash flow of MSEDCL depends on the recovery of revenue and arrears from the consumers. MSEDCL is supplying electricity to various categories of consumers and 100% of recovery has been an uphill task and the revenue of MSEDCL is seriously affected. MSEDCL is not able to make timely payment to not only Wind Generators but almost all Generators. Due to severe drought conditions, recovery from Residential, Commercial and Industrial as well as Agricultural Consumers is adversely affected. Hence the financial position of the MSEDCL is affected. b) Inadvertent delay in payments to some Generators are attributable to circumstances which are beyond the reasonable control of MSEDCL. c) During the last five years, the total expenditure has increased. However, total revenue has not increased in that proportion, which has resulted in accumulated losses. Thus, the shortfall has increased in FY and was met through shortterm borrowings and short term loan. There is a substantial shortfall in collection as Order in Case Nos 157, 166 of 2016, and 18 of 2017 Page 5

6 per the Aggregate Revenue Requirement (ARR) which has not been granted by the Commission as prayed by MSEDCL. This shortfall gets covered in the subsequent Annual Performance Review (APR) or true-up exercise by the Commission, which is completed only after 18 months from the approval of the ARR. This results in inability in meeting the payment obligations. Therefore, the revenue gap has increased over the years. MSEDCL has to borrow loan from Financial Institutions like Banks, in which interest is also a necessary component which does not get passed through in the ARR. In the past, MSEDCL generally used to borrow short term and long term loans from the Banks. However, recently the Banks have refused to grant loan to it as its liability has substantially increased. d) MSEDCL is managing the repayment of loan liability either by working capital or deferring some of the payments due as sufficient cash is not available to clear all liabilities. The Commission has not been approving the expenditure incurred on interest on working capital loan, which has resulted in further reduction of internal cash available for payment for debt servicing. e) This deteriorating cash flow has resulted in total outstanding payment as on 31 January, 2017 of Rs. 12, crore. Due to the liquidity crunch, the payments of Wind Generators are lagging behind. f) The reliefs sought by WOWAI, if granted, would seriously prejudice the interest of consumers in the State, and may be accounted as "cost" in the ARR of MSEDCL if allowed by the Commission. MSEDCL is making payments to WOWAI with a little delay which is not intentional or deliberate g) MSEDCL seeks that the Commission i) hold that DPC as claimed by WOWAI is not maintainable. ii) hold that Wind Generators claiming DPC have already recovered the cost of their Projects. (iii) Relax/modify/delete Cause of the EPAs (iv) pass such further orders as this Commission deems fit. 5. In its Rejoinder dated 30 March, 2017, WOWAI has denied and rejected MSEDCL s contentions. Further to its request during the hearing held on 16 March, 2017 for permission to include additional Members in its Petition, WOWAI has also submitted details of 18 other Members and their authorization, and of 3 more Members who wish to opt for set-off of their dues against payments to be made by MSEDCL under the EPAs. 6. The list of Members involved in the Petition of WOWAI, separately showing those who have sought setting off of the dues payable by MSEDCL against their consumer energy bills, is annexed to this Order. CASE No. 166 of M/s Rajlakshmi Minerals (RM), Office Nos. 311 and 312, 3 rd floor, Hari Chambers, 58/64 Shahid Bhagat Singh Road, Fort, Mumbai, a partnership concern engaged in the Order in Case Nos 157, 166 of 2016, and 18 of 2017 Page 6

7 generation of electricity from wind power plants and registered under the Companies Act, 1956, has filed a Petition on 25 November, 2016 citing Section 86(1) (f) of the EA, 2003 for adjudication of its dispute with MSEDCL. It owns a 3.40 MW (4. X 850 KW each) wind power facility in Pusrali and Altur villages, Shahuwadi Taluka, Kolhapur District, Maharashtra. 8. The Prayers of RM are as follows: a. Direct the Respondent to pay a sum of Rs.3,37,76,810.55/- towards electricity generated by the Petitioner in respect of September 2015 to August 2016; b. Direct the Respondent to pay a sum of Rs.21, /- to the Petitioner as interest on delayed payments in respect of month of March 2014 to August 2015; c. Direct the Respondent to pay interest pendent-lite till the eventual payment of the sum at 1.25% per month; d. Pending the hearing and final disposal of the present Petition, this Hon ble Commission be pleased to direct the Respondent to deposit a sum of Rs.3,59,20,639.84/- or such other amount as this Hon ble Commission may deem fit in this Hon ble Commission; e. For ad-interim reliefs in terms of prayer clause (E); f. For costs; and g. For such other and further reliefs as this Hon ble Commission may deem fit and proper in the nature and circumstances of the present Petition. 9. The Petition states as follows: a) A Wind EPA was entered into with MSEDCL on 26 August, Under the terms of the EPA, RM was to offer for sale the entire quantum of electricity generated from its wind power plants, and was under an obligation to purchase the entire electricity generated by RM. The power purchase tariff would be governed by the Commission s Renewable Energy (RE) Tariff Regulations, 2010 and its RE Tariff Order dated 22 March, 2013 in Case No. 6 of Accordingly, the tariff for the purchase of the generated wind electricity was Rs per Kwh. b) As per Section of the EPA, the due date of payment is 60 days from receipt of the monthly energy bills by MSEDCL. In case of delay in payment, the Seller shall be entitled to DPC at 1.25% per month [and is similar to the provisions of the EPAs quoted at para 3(d) earlier in this Order]. Monthly bills were raised from March 2014, but MSEDCL did not make timely payments. After continuous follow up and several meetings, no action has been taken to amicably settle the issue. Order in Case Nos 157, 166 of 2016, and 18 of 2017 Page 7

8 c) MSEDCL is liable to pay Rs.21,43,829 by way of DPC and Rs 3,37,76,810 against unpaid invoices and interest due thereon. Hence MSEDCL owes a total amount of Rs.3,59,20,639. This outstanding amount is causing immense financial hardship to RM as it had availed a term loan facility of Rs.15 crore for setting up its Wind Power Plants and has to make payments towards the discharge of this debt. RM has also signed an Operation and Maintenance (O&M) contract with Gamesa Wind Turbines Pvt. Ltd. for which it has to make payments of about Rs. 30 lakh per month. d) The recent ruling of the Supreme Court in Chairman, Tamil Nadu Electricity Board v/s M/s Indian Wind Power Association (Civil Appeal 2397 of 2014) reads as follows: We see no reason to interfere with the award of simple interest at the rate of 10% per annum on the amount outstanding against the appellant- Electricity Board. The Appeal is accordingly dismissed. e) Section of the EPA (dealing with Dispute Resolution) stipulates that the performance or non-performance of any obligation under the EPA shall be exclusively adjudicated before the Commission. The Commission may direct MSEDCL to pay the outstanding dues. 10. MSEDCL s Reply dated 14 March 2017 is along the same lines as its Reply to the Petition of WOWAI in Case No. 157 of 2016, which has been summarized at para. 4 of this Order and is, therefore, not being set out again here. CASE No. 18 of M/s Dhanji Developers ( Dhanji ), a sole proprietary firm engaged in construction and realty and also generation of wind energy, with its office at 303/359, Palai Complex, Bhandarkar Road, Matunga CR, Mumbai, has filed a Petition on 11 January, 2017 citing Section 86(1)(f) of the EA, 2003 for adjudication of its dispute with MSEDCL. 12. The Prayers of Dhanji are as follows: b. Direct MSEDCL to make payment of the Outstanding Amount towards Sales invoices due from June, 2015 for the Project of the Petitioner at Nasik till date within seven(7) days[a sum of Rs.11,51,59,358/-(Rupees Eleven Crores Fifty One Lakhs Fifty Nine Thousand Three Hundred and Fifty Eight Only) is outstanding towards invoices as on September 30,2016 as detailed in Annex C]; c. Direct MSEDCL to make payment of the Outstanding Amount towards DPC as per the WIND EPA s[a sum of Rs.85,99,122/-(Rupees Eighty Five Lakhs Ninety Nine Thousand One Hundred and Twenty Two only) is outstanding DPC for the Project of the Petitioner situated at Nasik as on September 30,2016 is also detailed in Annex C]; d. Direct the Respondents to pay carrying cost at the rate of 15% per annum of the delay in payment of the late payment surcharge by the Respondent; Order in Case Nos 157, 166 of 2016, and 18 of 2017 Page 8

9 e. Award costs of these proceedings against MSEDCL and in favour of the Petitioner; and f. Pass such other order(s) as the Hon ble Commission may deem just in the facts of the present case. 13. The Petition states as follows: a) Dhanji has entered into a Wind EPA dated 4 April, 2009 with MSEDCL for the sale of power generated by its Project at Nashik of 7.5 MW. Section 4.01 of the EPA states its term as 13 years from the date of the commercial operations of the Plant. b) As per Section of the EPA [which is similar to the EPA provision cited by WOWAI in Case No. 157 of 2016 and quoted at para. 3 earlier in this Order], a credit period of 45 days from the date of receipt of the invoice is available to MSEDCL for making payments. While MSEDCL is entitled to a rebate in case of early payment, a DPC at 2% per annum above the SBI short term lending rates is attracted for delay beyond 45 days from the date of receipt of invoice by MSEDCL. c) Monthly invoices have been sent to MSEDCL for the energy generated and supplied by Dhanji. MSEDCL has paid principal sums against the invoices till the month of May, 2015 but not thereafter despite repeated requests and follow up. As on 30 September, 2016, Rs. 11,51,59,358 is outstanding towards principal and Rs. 85,99,122 is outstanding towards DPC. d) The Project is a funded Project and Dhanji has to service the debt on a monthly basis and in time as any default under the financing agreements leads to default consequences which include declaring Dhanji as a non-performing asset, amongst others. Non-payment for such prolonged period and delayed payments are causing financial hardship to Dhanji in fulfilling its financial obligations and creating severe constraints on its other businesses. e) Enough opportunities have been given to MSEDCL to perform its obligations under the EPA. MSEDCL has neither made payments nor made any attempt to resolve the issues arising out of its non-performance under the EPA. f) As per clause under Section of the EPA pertaining to dispute resolution [which is similar to the provision of the EPAs cited by WOWAI in Case No. 157 of 2016 and quoted at para. 3(j) earlier in this Order], the Commission is conferred with jurisdiction to deal with non-performance of any obligation under the EPA. The Commission may direct MSEDCL to comply with the terms of the EPA in letter and spirit, including its obligation to pay the outstanding invoices as well as DPC. g) Since it has been compelled to approach the Commission on account of the default of MSEDCL, Dhanji should not be burdened with Petition Fees of Rs. 5 lakh. These fees should either be waived off or be reimbursed by MSEDCL to it. Order in Case Nos 157, 166 of 2016, and 18 of 2017 Page 9

10 h) Recently, in its Order in Petition Nos. 570 of 2015, etc. [quoted at para. 3(k) earlier in this Order with regard to Case No. 157 of 2016], the RERC has held that the Distribution Licensee is liable to make payment as per the PPAs, including DPC. i) In Case No. 150 of 2015 in the HZL matter [quoted at para 3(l) above with regard to Case No. 157 of 2016], this Commission has also held that MSEDCL is liable to pay DPC on the outstanding payments. 14. MSEDCL s Reply dated 14 March 2017 is along the same lines as its Reply to the Petition of WOWAI in Case No. 157 of 2016, which has been summarized at para. 4 of this Order and is, therefore, not being set out again here. 15. In its Rejoinder dated 1 April, 2017, Dhanji has denied and rejected the contentions made by MSEDCL in its Reply. 16. At the hearing held on 16 March, 2017, the Commission observed that, since similar issues have been raised in these Cases by Wind Energy Generators, they would be heard together, and the Commission would also consider a common Order. The Parties agreed. The proceedings of the hearing are summarised in the Daily Order as follows. Case No. 157 of WOWAI stated that: i) WOWAI has Members engaged in generation of wind energy who have entered into EPAs with MSEDCL for the sale of power generated by their Projects. The term of the EPAs is 13 years from the date of commercial operations, and the EPAs are valid and subsisting. ii) iii) iv) As per the EPAs, a credit period of 45 days or 60 days, depending on the Project, from the receipt of invoices is available to MSEDCL for releasing payments. DPC at 2% per annum above the SBI short term lending rates for the first category of Projects and 1.25% per month for the second category is applicable for delay beyond the stipulated period. MSEDCL has paid the principal sums against the invoices raised but not the DPC. MSEDCL also requested some Members not to claim DPC or waive it if already claimed. However, at the same time MSEDCL is not offering set-off of the dues payable to those Members who are also its consumers. Sufficient opportunity has been given to MSEDCL to perform its obligations under the EPAs. MSEDCL is adopting a discriminatory approach by paying dues to other Generators and not to the Wind Generators. v) MSEDCL is pleading the same financial constraints/reasons for delay in making payments which were earlier submitted by it to the Commission in Order in Case Nos 157, 166 of 2016, and 18 of 2017 Page 10

11 other similar Cases recently. Hence, a time frame may be stipulated now for MSEDCL to make the payments Case No.166 of RM stated that: i) It owns a 3.40 MW Wind Power facility at Pusrali and Altur villages, Shahuwadi Taluka in Kolhapur District, Maharashtra. As per the EPA, a credit period of 60 days is available to MSEDCL for payments. A DPC at 1.25% per month is applicable for delay in payment. ii) iii) MSEDCL has paid principal sums against invoices till October, 2015, but not made any payments thereafter. RM has availed term loan of Rs.15 crore for its Project and has to discharge its debt. It also has to make payments of around Rs. 30 lakh per annum towards the operation, maintenance and upkeep of the wind turbines. Case No.18 of Dhanji stated that: i ii. It has entered into EPA dated 4 April, 2009 with MSEDCL for 13 years for the sale of power generated by its 7.5 MW Project. As per the EPA, a credit period of 45 days is available to MSEDCL for releasing payments. A DPC of 2% per annum above the SBI short term lending rate is attracted for delay beyond 45 days. iii. MSEDCL has paid the principal sums against invoices till May, 2015 but not thereafter. 4. MSEDCL stated that it has preferred an Appeal before the Appellate Tribunal for Electricity (ATE) against the Commission s Order in the HZL matter on 3 November, 2016 (DFR No. 3623/2016). However, there is no stay on the Commission s Order as of now. MSEDCL has made a general argument/submission in all these Cases for the Commission s consideration. MSEDCL has made payments of about Rs. 400 crore till December, 2016 to several Wind Generators, and would submit the details of outstanding payments. 5. The Commission observed that some WOWAI Members had offered the option of setting off the dues from MSEDCL against their consumer bills, which MSEDCL did not accept. MSEDCL responded that the proposals are being forwarded to its competent Order in Case Nos 157, 166 of 2016, and 18 of 2017 Page 11

12 authority for consideration, by way of which some dues may get settled. The Commission observed that exercising this option earlier, which is a standard practice in many cases where there are dues on both sides, would have been prudent and beneficial to both MSEDCL and the Petitioners. 17. Vide letter dated 20 April, 2017, RM has communicated that it has not received details of outstanding payments from MSEDCL. The Commission has also not received these details. However, the absence of these details does not materially affect the findings on the issue raised in these Cases. Commission s Analysis and Ruling 18. The Petitioners in these Cases are Wind Energy Generators (and an Association of such Generators) who have not been paid by MSEDCL for the power supplied by them under their respective EPAs since long, or the DPC arising from this delay as required under the EPAs. 19. MSEDCL has, in effect, not disputed its liability to pay the principal amounts and the DPC to the Petitioners under the terms of the EPAs, but stated that the delay is because of its financial difficulties and is not deliberate or with malafide intention. However, it has also sought deletion or relaxation of the EPA provisions. 20. All the EPAs contain standard clauses requiring MSEDCL to pay DPC for delay in paying the principal amounts (at 2% per annum above the SBI short-term lending rate beyond 60 days in some, and at 1.25% per month after 45 days in others). These clauses are based on the Commission s first Wind Energy Order dated 18 September, 2003 and subsequent Orders, the relevant Regulations, and other dispensations from time to time. However, while some specifics may differ, such provisions for delayed payments are not peculiar to Wind EPAs, and are also specified in the Commission s Multi-Year Tariff Regulations, RE Tariff Regulations and Open Access Regulations. 21. In general, DPC is in the nature of a surcharge for default in making timely payments. While delay in making payments impacts the concerned Generators, the DPC liability also affects MSEDCL since it cannot pass it on to its consumers because it arises out of default in duly making payments. Its impact on MSEDCL could have been cushioned by adjusting the payments due against the energy bills of Generators in their capacity as consumers, as some Petitioners suggested, but it did not do so either. In any event, the financial difficulties cited by MSEDCL are extraneous to its contractual obligation to pay Generators in time, along with DPC to the extent of any delay. MSEDCL s claim that the Petitioners have recovered their investments is also not relevant to its liability to pay the DPC, which is a basic commercial principle and provided for in the EPAs (and also ignores the basis of the EPA term mandated by the Commission.) 22. This is the settled position in law, and the Petitioners have cited various rulings in this regard. The Commission s Order dated 10 August, 2016 in Case No. 150 of 2015 Order in Case Nos 157, 166 of 2016, and 18 of 2017 Page 12

13 (in the HZL matter, which has been appealed against by MSEDCL but admittedly not stayed by the ATE, and has been quoted at para. 3(l) above) and its Order dated 16 March, 2017 in Case No. 53 and other Cases of 2016 may also be referred to. The principle of DPC has also been upheld by the ATE in Appeal Nos. 15 of 2007, 148 of 2009, 1 of 2010 and 11 of 2012 all concerning payments for the energy sold by Wind Energy Generators in Maharashtra to MSEDCL which have been quoted by the Commission in its earlier Orders. 23. In view of the foregoing, the Commission expects MSEDCL to pay the principal amounts due to the Petitioners expeditiously. In the meantime, in line with its Order in Case No. 150 of 2015 and the more recent Orders dated 16 March, 2017, the Commission directs MSEDCL to pay the DPC amounts due within 30 days. Thereafter, interest will accrue at 1.25% per month on any DPC amount remaining to be paid. In the case of those Petitioners and concerned WOWAI Members who had sought set-off of dues, MSEDCL can also opt to adjust these amounts against their consumer energy bills. 24. The Commission s Fees and Charges Regulations do not provide for waiver of Petition fees, as sought by Dhanji. The Petitions in Case Nos. 157 and 166 of 2016, and 18 of 2017 stand disposed of accordingly. Sd/- (Deepak Lad) Member Sd/- (Azeez M. Khan) Member Order in Case Nos 157, 166 of 2016, and 18 of 2017 Page 13

14 ANNEXURE TO ORDER DATED 16 May, 2017 IN CASE NO. 157 OF 2016 List of concerned Members of Windmill Owners Welfare Association of India Members Sr. No. Name of the Owner 1 A.P. Fashions Pvt.Ltd. 2 Chirag Ice Factory Pvt.Ltd. 3 Ess Gee Real Estate Developers (P) Ltd. 4 Gold Star Diamond Ltd (R. T.Diamond Pvt. Ltd.) 5 Gadre Marine Export 6 Igloo Dairy Services Pvt. Ltd ( Formerly known as R.B. Chemicals & Agro Ind. Pvt. Ltd Mumbai) 7 KPL International LTD 8 Modelama LG INC 9 Priyadarshini Polysacks Ltd. 10 Rajesh Construction Co. Pvt. Ltd 11 Ratnakala Export Pvt.Ltd 12 Rindiam Export 13 Shri Durga Crane Company 14 Naik Frozen Foods Pvt.Ltd * 15 Refrigerated Dist. Pvt. Ltd. 16 Naik Seafoods Pvt.Ltd. * 17 Hemnil Metal Processors Pvt.Ltd 18 Alpha Flock ( India) Pvt.Ltd. 19 Air Control India Pvt. Ltd. 20 Kwality Tobacco Products 21 Pertinent Infra and Energy Ltd. 22 Pristine Industries Limited 23 Topaz Investments Pvt.Ltd. 24 Dr. Sanosh Kamlesh Prabhu 25 M/s Partytime Ice Pvt. Ltd. * 26 Taurian Iron & Steel Co.Pvt.Ltd. 27 S.M.Steels 28 Suyog Development Corporation ltd Order in Case Nos 157, 166 of 2016, and 18 of 2017 Page 14

15 29 Indian Writing Instruments Pvt. Ltd. 30 Mr. Jayant Govind Thakkar 31 NPR Finance LTD 32 Chhotabhai Jethabhai Patel & Co 33 Syntex Corporation Pvt. Ltd. 34 Mehra Tex India Pvt. Ltd. 35 Wham Investments Pvt. Ltd. 36 Alto Power & Energy (India) Pvt. Ltd. 37 S J Impex Prop. Jitendra J Mehta 38 Kukreja Development Corporation 39 Kukreja Enterprises 40 O.P. Enterprises 41 OM Intercontinental 42 Priyata Intercontinental 43 Marudhar Fashions 44 Bhansali Diamonds 45 Transport Corporation of India Ltd. * Members of WOWAI who have sought setting off of the dues payable by MSEDCL against their consumer energy bills. Order in Case Nos 157, 166 of 2016, and 18 of 2017 Page 15